ORLANES & BANAAG TRANSPORTATION COMPANY, INC., ET AL., PETITIONERS AND APPELLANTS, VS. THE ASIATIC PETROLEUM COMPANY (P. I.), LTD., AND LAGUNA-TAYABAS BUS COMPANY, RESPONDENTS A…

This is an appeal taken by the Orlanes
& Banaag Transportation Co., Inc., Ricardo Remo, Laureano
Calongcalong and Emilia Remo from the order of the Public Service
Commission, the dispositive part of which reads as follows:

“Upon consideration of the reasons alleged by
both applicants and oppositors, and following the precedent established
by this commission in case No. 26298, “Parsons Hardware Co., Inc.,
applicant,’ the commission hereby renders judgment declaring that,
without prejudice to setting this case for hearing later on, after case
No. 3377 of the Court of First Instance of Tayabas is decided, it
should as it does hereby recognize the Laguna-Tayabas Bus Company as
the assignee de facto of the above-mentioned certificates of
public convenience of the Orlanes & Banaag Transportation Co.,
Inc., which were sold at public auction by the sheriff of the City of
Manila to the Asiatic Petroleum Co. (P. I.), Ltd., and resold by the
latter to said LagunaTayabas Bus Company, with the’ right to
temporarily operate under such certificates until further orders to the
contrary from this commission.

“Wherefore, the
Laguna-Tayabas Bus Company is hereby authorized to temporarily operate
the land transportation service awarded to the Orlanes & Banaag
Transportation Co., Inc., in cases Nos. 16582, 16197, 20633, 17059,
16667, 20334, 11815, 11645, 12313, 16474, 16475, 13976, 16470, and
16476, of this commission subject, however, to strict compliance with
the conditions imposed in each and every one of the aforesaid
certificates.

“This decision does not resolve nor in any
manner affect the question raised by the receiver Jose Antillon before
the Court of First Instance of Tayabas in case No. 3377, relative to
the legality of the sale of the certificates of the Orlanes &
Banaag Transportation Co., Inc., by the sheriff of the City of Manila,
and is understood to be without prejudice to whatever may be the result
of said case.”

In support of their appeal,
the appellants assign the following alleged errors as committed by the
Public Service Commission in its aforesaid order, to wit:

“1. In recognizing the Laguna-Tayabas Bus Company as assignee de facto
of the certificates of public convenience issued to the Orlanes &
Banaag Transportation Company, Inc., in cases Nos. 16582, 16197, 20633,
17059, 16667, 20334, 11815, 11645, 12313, 16474, 16475, 13976, 16470,
and 16476.

“2. In authorizing the Laguna-Tayabas Bus
Company, under special permit, to temporarily operate the service
awarded to the Orlanes & Banaag Transportation Company, Inc., under
the certificates of public convenience issued in the above-mentioned
cases.

“3. In denying the petitioners-appellants’ motion for reconsideration.”

The following pertinent facts are necessary for the resolution of the questions raised in this appeal, to wit:

On July 2, 1931, the Asiatic Petroleum Co. (P. I.), Ltd., filed a
complaint docketed in the Court of First Instance of Tayabas as civil
case No. 3047, against the Orlanes & Banaag Transportation Co.,
Inc., for the recovery of certain sums of money, praying, among other
things for the appointment of a receiver of all the property, credits
and equipment of said defendant company. In accordance with said
petition, the court appointed the Philippine Trust Company as judicial
receiver, which, in such capacity, took possession of the property of
said defendant company and assumed the management of the transportation
business thereof.

The Philippine Trust Company was succeeded in its capacity as
judicial receiver by Enrique Bautista, who, in turn, was subsequently
succeeded by the present receiver Jose Antillon.

During the pendency of the aforesaid civil case No. 3047 in the
Court of First Instance of Tayabas and before the hearing of the same
was held, many individuals and firms filed third party claims therein.

After due hearing, the Court of First Instance of Tayabas rendered
judgment in favor of the plaintiff the Asiatic Petroleum Co. (P. I.),
Ltd., and third party claimants, ordering the defendant Orlanes &
Banaag Transportation Co., Inc., and the receiver Philippine Trust
Company to pay to the plaintiff the Asiatic Petroleum Co. (P. I.),
Ltd., the sum of P37,488.16 with interest thereon at 9 per cent per
annum from August 26, 1931, until fully paid, together with the sum of
P2,094.98 representing the accrued interest on the capital from January
31 to August 25, 1931.

Not being satisfied with the decision, the Orlanes & Banaag
Transportation Co., Inc. appealed therefrom to this court, which appeal
was docketed as G, R. No. 38097.^[1]

Pending said appeal, the Court of First Instance of Tayabas issued
a writ of execution of the judgment appealed from. Under said writ the
sheriff of Manila and of the Provinces of Tayabas and Batangas attached
the certificates of public convenience issued by the Public Service
Commission in favor of Orlanes & Banaag Transportation Co., Inc.,
in cases Nos. 16582, 16197, 20633, 16059, 16667, 20334, 11815, 11645,
12313, 16474, 16475, 13976, 16470, and 16476, which were under the
control and management of the judicial receiver Jose Antillon, and
after the necessary proceedings sold them at public auction,
adjudicating all of said certificates to the Asiatic Petroleum Co. (P.
L), Ltd., the highest bidder at the said sale.

Inasmuch as the Asiatic Petroleum Co. (P. I.), Ltd., was not
engaged in the transportation business nor was it disposed to operate
the transportation lines covered by said certificates of public
convenience, it transferred all its rights, title and interest therein
to the Laguna-Tayabas Bus Company (Exhibits A and B).

On November 10, 1932, the Asiatic Petroleum Co. (P. I.), Ltd., and
the Laguna-Tayabas Bus Co. applied to the Public Service Commission in
case No. 34371, now under consideration, for the approval of the sale
of the aforesaid certificates of public convenience by the sheriff of
the City of Manila to said Asiatic Petroleum Co. (P. I.), Ltd., and of
the transfer thereof by the latter to the Laguna-Tayabas Bus Company,
in accordance with the provisions of section 16, paragraph (h) of Act
No. 3108, as amended. The LagunaTayabas Bus Company further prayed for
authority to operate the lines specified in said certificates. Upon
notice to the parties and after due hearing, the Public Service
Commission granted said application and on March 26,1933, issued the
order hereinbefore quoted.

The appeal taken in said civil case No. 3047 of the Court of First
Instance of Tayabas, which was docketed in this court as G. R. No.
38097, supra, was decided by affirming the appealed judgment in toto.

The first question to decide in this appeal, which is raised in the
first assignment of error, is whether or not the Public Service
Commission committed an error in recognizing the Laguna-Tayabas Bus
Companv as assignee de facto of the certificates of public convenience in question issued in favor of Orlanes & Banaag Transportation Co., Inc.

In case No. 26298 of the Public Service Commission, G. R. No. 36713 ^[1]
of this court, wherein Parsons Hardware Co., Inc., had filed an
application for the approval of the sale of certain certificates of
public convenience of the Orlanes & Banaag Transportation Company,
Inc., by the sheriff of the City of Manila on February 5, 1931, by
virtue of an extra judicial foreclosure of chattel mortgage, which
certificates were adjudicated to said applicant as the highest bidder,
and of the assignment of its rights thereto to the Laguna-Tayabas Bus
Company, said commission granted the application in question, approved
said sale, and recognized the Laguna-Tayabas Bus Companyas assignee de facto
of said certificates of public convenience, authorizing it to
temporarily operate the land transportation service awarded to the
Orlanes & Banaag Transportation Co., Inc., in cases Nos. 16197/
16582, 16667, 20633, and 10756. Against said order the Orlanes &
Banaag Transportation Co., Inc., applied to this court for a writ of
certiorari questioning the jurisdiction of the Public Service
Commission to approve said sale, assignment, and authority issued to
the Laguna-Tayabas Bus Company to temporarily operate the
transportation lines granted under said certificates of public
convenience.

Upon review of said appeal and after considering all the questions raised therein, this court denied the writ.

In denying the petition for a writ of certiorari filed against the
order issued in said case No. 26298, declaring that both the sale and
the assignment of said certificates of public convenience were legal
and valid, this court implicitly declared that the holding of the
Public Service Commission to the effect that the Laguna-Tayabas Bus
Company was an assignee de facto was also legal and valid.

 

The appellants contend that inasmuch as the certificates of public
convenience in question were in the hands and under the control of a
judicial receiver and, therefore, in custodia legis, the
Court of First Instance of Tayabas had no jurisdiction to order the
sale thereof and, consequently, the sale made by the sheriff of the
City of Manila to the Asiatic Petroleum Company (P. I.), Ltd., and the
assignment for the latter of its rights in favor of the Laguna-Tayabas
Bus Company are null and void.

In the case of Cu Unjieng e Hijos vs. Mabalacat Sugar Co.
(58 Phil., 439), which was decided on September 22, 1933, this court
held that the court, which ordered the placing of the mortgaged
property in the hands of a receiver in a foreclosure proceeding, has
jurisdiction to order the sale of said property at public auction even
before the termination of the receivership.

In the case under consideration, it was the same Court of First
Instance of Tayabas, which ordered the certificates of public
convenience in question placed in the hands of a receiver, appointed
the receiver who was to take charge thereof, and ordered the receiver
thus appointed to sell said certificates. In accordance with the
afore-cited doctrine, said Court of First Instance of Tayabas had
jurisdiction to order said sale.

Therefore, the first question raised by the appellants in their
first assignment of error has already been decided by this court in the
certiorari proceeding, instituted in case No. 26298 of the Public
Service Commission, G. R. No. 36713, supra, of this court.

With respect to the second assignment of error, inasmuch as the
sale and assignment of the certificates of public convenience in
question are legal and valid, the authority given to the assignee
Laguna-Tayabas Bus Company to operate the transportation lines awarded
under said certificates is likewise legal and valid as a logical
consequence of the said sale and assignment which were declared legal
and valid.

In view of the foregoing considerations, this court is of the
opinion and so declares: (1) That Courts of First Instance have
jurisdiction to appoint judicial receivers in actions for recovery of
sums of money, wherein the attachment of certificates of public
convenience and the placing thereof, in the hands of a receiver are
prayed for, and to order the sale of said certificates at public
auction even before the termination of the receivership, and (2) that
the Public Service Commission has jurisdiction to approve the sale of
certificates of public convenience in the hands of a receiver as well
as the assignment made by the purchaser at public auction of his rights
therein, and to authorize said assignee to operate the transportation
lines awarded under said certificates (Raymundo vs. Luneta Motor Co., [1933], 58 Phil., 889).

Wherefore, the order appealed from is hereby affirmed, with costs against the appellants. So ordered.

Malcolm, Hull, Imperial, and Goddard, JJ., concur.

---

^[1] Asiatic Petroleum Co. vs. Orlanes & Banaag Transportation Co., p. 24, ante.

^[1] Orlanes & Banaag Transportation Co. vs. Public Service Commission (57 Phil., 634).